The Consumer Rights Act 2015 (CRA) came into force six months ago in October 2015. The Competition and Markets Authority (CMA) has now published Guidance on writing fair contracts.
The Guidance consists of short two page guides to help businesses who deal with consumers understand the provisions of the CRA and provides some tips for drafting. They point out that a term that is unfair will not be binding on a consumer and may lead to enforcement action against the business. Topics covered in the guides include deposits and advance payments, automatic renewals, excessive charges for breach of contract or early cancellation, limits of liability, variations, rights of cancellation and other boilerplate terms such as entire agreement clauses and prohibitions on assignment.
The message from the CMA is that having clear and fair terms in a contract will:
- Save the business time
- Help prevent disputes and reputational damage
- Protect the business if something goes wrong
Businesses should act now to review their terms and conditions and, where necessary, amend them to make sure they comply with the law.